BY LAKACHEW ATINAFU
In a country where crawling service, it would be to think about development and prosperity a moon to come project as the public is suspicious about its representatives and on the limbo of the execution capacity of shoulder skirling leaders.
Amid all these, nice to charisma in the planet of earth and not expecting from excetrateritorial life and superstitious matter, human began to manage the world with Knowledge.
It is not about metaphysics; it is rather the very important part of life epistemology where creatures dwell the toil they are created for.
Now the world is traveling from globalization to digitalization, hence it is better to cope up with institution otherwise incompetence lead to natural penalty.
In the course of history and fundamental changes of circumstances Ethiopians have passed through temptations for reasons it were not researched well. As time passes, some responsible citizens began to realize the naked truth and adopt best practices of the world.
Most of all the transaction cost of time was not thought of for ages; citizens were in misery to have services especially in banks custom offices, emigration, and among other service providing offices.
According to the experience of the world and taking into consideration the value of time wasted in the process of transaction, some institutes aspired to up line the countries’ transaction system to digitalization.
In resent discussion held in the capital, the Addis Ababa Chamber of Commerce told members of media that the world is on the spring board from globalization to digitalization.
Financial technology (better known as Fintech) is used to describe new tech that seeks to improve and automate the delivery and use of financial services. At its core, fintech is utilized to help companies, business owners, and consumers better manage their financial operations, processes, and lives by utilizing specialized software and algorithms that are used on computers and, increasingly, smart phones. Fintech, the word, is a combination of “financial technology.”
When fintech emerged in the 21st century, the term was initially applied to the technology employed at the back-end systems of established financial institutions. Since then, however, there has been a shift to more consumer-oriented services and therefore, a more consumer-oriented definition. Fintech now includes different sectors and industries such as education, retail banking, fundraising and nonprofit, and investment management, to name a few.
Fintech also includes the development and use of crypto currencies, such as Bit coin. While that segment of fintech may see the most headlines, the big money still lies in the traditional global banking industry and its multi-trillion-dollar.
In Ethiopia it is not uncommon to see queues to take a taxi, pay tax and to serve for vital registration
Yilikal Abate, business and technology expert and IT solution software engineer and guest speaker on the very day said that domestic institutions have to compete with the over sea business as the fittest will survive.
Ethiopia has been incurring staggering amount of money for business transaction and as a result people are lamenting over the state for complaints resulted from business as usual.
The traditional routine of finance need to be rewind has to cop up with the emerging world otherwise the fit will engulf unfits.
So the finance sector banking and other service sector need to be digitalized and as we aspire to liberalize our economy, the nation has to find a way to be more competent in the international business arena then it would be convenient Ethiopia is serving and updating itself to the world.
Of course, the resent development demands there are initiatives in the banking and telecom sectors.
The business transaction and the banking sector which forced the citizenry to bow down for government’s policy would never work and be functional again as the world is on the light gear and emancipated from mental slavery bureaucracy and aristocracy.
The initiatives undertaken by the Ethiopian Commercial bank and ethio-telecom might be a smart move and a good stride according to the expert.
Digitalizing the financial sector as it has been observed from the experience of many countries, it will reduce transaction cost.
Intermediaries and time will be at no cost and digitalization not demands the physical value of money man. Of course, there are many challenges as the digital technology hardly addresses the amassed citizens in the agriculture construction and other sectors.
The expert was so optimistic that the advancement of hydropower’s and data centers will alleviate all complications related with digitalization.
The expert finally emphasized that the service should reach the major pillar of the economy as the country is still not emancipated from the primary economic activity.
Of course, the use case approach is very essential to manipulate the complexity of every endeavor in the process of adopting and parallel fixing new outlooks and technologies contextualizing them in domestic objectives.
Finance digitalization entails the integration of multiple technologies and strategies that enable the finance function to deliver value in the digital age. Learn the proven best practices to prepare for a digital world and deploy the right technologies for your finance organization. Ethiopia’s National Financial Inclusion Strategy, released by the National Bank of Ethiopia in 2017, sets a broad government vision and aggressive targets for increasing financial inclusion. Achieving these goals will require continued growth of diverse financial services powered by mobile technology.
Without visiting Ethiopia, it’s hard to gauge the country’s movement towards a digital economy. But the in-country assessment and conversations with industry stakeholders revealed that Ethiopia is racing to become a leader in digital financial services.
Ethiopia challenges many assumptions of how to create a functioning DFS ecosystem. The initial assessment uncovered three positive findings:
One is the single, state-owned telecommunications company is protected from competition, at least for the time being, yet has aggressive targets to move from 60 to 100 million subscribers in coming years. Government mandates for network expansion and vendor financing just might provide the ingredients for continued network improvements.
Mobile phone ownership rates are rising and handset prices are falling. Expecting to hear issues of inadequate network coverage as a hurdle for DFS, we instead found 80-87 percent network coverage and a lack of concern about the absence of competitive offerings.
The other is the government is moving to digitize both the government-to-person (G2P) and person-to-government (P2G) payment streams, services dependent on adequate network coverage. Of course, there are risks involved in dependence on a single telecommunications provider in a market – but it looks like this is something that could begin to change for Ethiopia in the years to come.
And the third is the banking sector, while closed to foreign ownership, is championing agent banking with mobile technology. Banks and microfinance institutions (MFIs) are contracting agents authorized to open accounts and conduct Know Your Customer (KYC) procedures electronically.
Agent banking products offered by multiple financial institutions but under common brands such as Hello Cash and M-Birr provide user interfaces in multiple languages, offline capabilities, and multilingual customer service centers.
The largest state-owned bank, the Commercial Bank of Ethiopia (CBE), launched its mobile offering (CBE Birr) in December 2017 with no-fee transactions and short codes to enable merchant payments, all while compensating its agents to incentivize recruitment and performance. A locally-owned technology company acquired an MFI to offer integrated digital services, including G2P/P2G payments and data-driven agricultural index insurance. A start-up led by local entrepreneurs, Yen pay, has enabled e-commerce transactions through integration with CBE and other platforms.
THE ETHIOPIAN HERALD FRIDAY 19 AUGUST 2022
